Item 2.03 Creation of a Direct Financial Obligation
or an Obligation under an
Off-Balance
Sheet Arrangement of a Registrant
On June 27, 2017, CA, Inc. (the
Company), as a borrower, amended and restated its $1.0 billion unsecured revolving credit facility (including a letter of credit
sub-facility)
(the Amended and Restated Credit
Agreement), among the Company, Citibank, N.A., as administrative agent, Bank of America, N.A., JPMorgan Chase Bank, N.A. (JPMorgan) and Morgan Stanley MUFG Loan Partners, LLC (MS MUFG), as
co-syndication
agents, Barclays Bank PLC, BNP Paribas, HSBC Bank USA, National Association, Keybank National Association, PNC Bank, National Association, The Bank of Nova Scotia, U.S. Bank National Association
and Wells Fargo Bank, National Association, as documentation agents, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, JPMorgan and MS MUFG, as joint lead arrangers and joint bookrunners, and the other banks
and financial institutions party thereto. The Amended and Restated Credit Agreement comprises commitments from 18 financial institutions. The Amended and Restated Credit Agreement expires June 27, 2022. However, the Company has the option to
extend such expiration date for additional
one-year
terms with the written consent of lenders having at least 50% of the commitments. Upon the approval of the Companys Board of Directors or a duly
authorized committee, the Company may, at its option and subject to customary conditions, request an increase in the aggregate commitment of up to $500 million.
Borrowings under the Amended and Restated Credit Agreement will bear interest at a rate dependent on the Companys credit ratings at the time of the
borrowing and, at the Companys option, will be calculated according to a base rate or a Eurocurrency rate, as the case may be, plus an applicable margin fee. Depending on the Companys credit ratings at the time of borrowing, the
applicable margin for a base rate borrowing ranges from 0.00% to 0.500% and the applicable margin for a Eurocurrency borrowing ranges from 0.795% to 1.300%. At the Companys current credit ratings, the applicable margin would be 0.125% for a
base rate borrowing and 1.000% for a Eurocurrency borrowing. In addition, the Company must pay facility fees, payable in arrears, quarterly on the first day of each January, April, July, and October, commencing July 1, 2017, at rates, depending
on the Companys credit ratings, ranging from 0.080% to 0.200% of the aggregate amount of each lenders revolving credit commitment. Based on the Companys current credit ratings, the facility fee is 0.125% per annum of the
$1.0 billion committed amount.
The Amended and Restated Credit Agreement contains customary covenants for transactions of this type, including two
financial covenants: (i) for the 12 months as of any date, the ratio of consolidated debt for borrowed money to consolidated cash flow, each as defined in the Amended and Restated Credit Agreement, must not exceed 4.00 to 1.00 and (ii) for
the 12 months as of any date, the ratio of consolidated cash flow to the sum of interest payable on, and amortization of debt discount in respect of, all consolidated debt for borrowed money, as defined in the Amended and Restated Credit Agreement,
must not be less than 3.50 to 1.00. The Amended and Restated Credit Agreement provides for customary events of default, including, among other things, defaults relating to other indebtedness of at least $100,000,000 in the
aggregate being rendered against the Company or its subsidiaries, judgments in excess of $100,000,000 in the aggregate being rendered against the Company or its subsidiaries, the acquisition of
40% or more by any person or group of any outstanding class of capital stock having ordinary voting power in the election of directors of the Company, and the incurrence of certain liabilities in excess of $100,000,000 in the aggregate under the
Employee Retirement Income Security Act of 1974, as amended. In addition, the Amended and Restated Credit Agreement contains the customary market language with respect to the recognition of the applicable European Union
bail-in
legislation.
Certain of the lenders, agents and other parties to the Amended and Restated Credit Agreement, and
their affiliates, have in the past provided, and may in the future provide, investment banking, underwriting, lending, commercial banking and other advisory services to the Company and its subsidiaries. These lenders, agents and other parties have
received, and may in the future receive, customary compensation from the Company and its subsidiaries for these services.
The foregoing description of
the Amended and Restated Credit Agreement and related matters is qualified in its entirety by reference to the Amended and Restated Credit Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.